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FRAUD or FINE

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  • FRAUD or FINE

    I have a friend who recently went into business for himself as a single-man shop. He sometimes picks up work from a well established general contractor who does alot of insurance work.

    The GC is asking him to send in two bids for every job. One 20% higher than the other. Of course my friend will get paid according to the lower one. The GC says "it's fine, all my subs do it."

    This is insurance fraud, is it not? I told him to run from this guy. Let the GC add his own profit into job. It sounds wrong on so many levels.

    Not to mention it sounds like he's underpricing his jobs by 20% if they're accepting the higher bids.
    "Man will do many things to get himself loved, he will do all things to get himself envied." Mark Twain

  • #2
    Re: FRAUD or FINE

    Not only is it insurance fraud but depending on how the GC cooks his books, it could also be a tax evasion issue.
    Teach your kids about taxes..........eat 30 percent of their ice cream.

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    • #3
      Re: FRAUD or FINE

      It's fraud. It's illegal and the sob should be turned in and prosecuted to the full extent of the law and then go to prison for the rest of his life, die and burn in the unholy fires of hell.

      Really though, it's this all too common practice that drives the cost of insurance up for everyone. And it happens in all sectors of the industry.
      It's a shame there's so many contractors out there that are so crappy at their trade, they feel the need to pull this crap.
      sigpic

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      • #4
        Re: FRAUD or FINE

        Yeah, that is insurance fraud. Every now and then I have people ask me to give one price for them, and one price for the insurance company. I just say sure thing, and thats the last I ever talk to those people. They wasted my time, and I am happy to have them wait by the phone thinking I am going to get back to them soon. I get so much more work by being honest. I will not jeopardize that to help some homeowner make a quick buck.

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        • #5
          Re: FRAUD or FINE

          Originally posted by Nevada plumber View Post
          I get so much more work by being honest. I will not jeopardize that to help some homeowner make a quick buck.
          Couldn't have said it better.
          This is my reminder to myself that no good will ever come from discussing politics or religion with anyone, ever.

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          • #6
            Re: FRAUD or FINE

            What I don't get is why the GC doesn't just take the original bids from the subs and tack on whatever profit he wants from the insurance company?
            Does he maybe have a contract with the IC that says he's restricted to a certain profit margin?
            If he's making 20% off of every sub then he's 'sittin in high cotton'.

            Where does the actual fraud come in? It's not like they are saying something has to be replaced that doesn't. Or that there was damage that didn't actually occur. The GC is definately lying to the IC or he's splitting it with someone at the IC and it's stupid for the plumber to be involved in that just to get the work but where is the illegallity?
            Morally and ethically wrong but is it illegal?
            "Man will do many things to get himself loved, he will do all things to get himself envied." Mark Twain

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            • #7
              Re: FRAUD or FINE

              sounds like he's skimming, becareful here it amazes me how you can end up by the wits of others someplace you dont want to be.

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